First transaction of its kind in 2011
1 March 2011.
Eurobank EFG concludes repo agreements in the international interbank market on Greek Government Bonds of € 1 billion
Eurobank EFG, building on its strong capital base, brand name and strong presence in the international money and capital markets, concluded successfully a new series of interbank repo agreements on Greek Government Bonds, with four major International Banks as counterparties.
This transaction was the first to be completed in the interbank market by a Greek Bank in 2011.
The tenor of the repo agreements varies from 3 months to 2 years and the total notional amount of the Greek Government bonds funded was € 1 billion. It should be noted that the agreement was concluded at very competitive terms i.e. interbank rate (Euribor) plus a spread ranging from 150 to 200 basis points, depending on the repo tenor.
In addition to the above mentioned transactions with Greek Government Bonds, Eurobank EFG finances currently a non Greek Bond portfolio (appr. €3bn) in the international capital markets.
It is the first time since the beginning of the year that a Greek Bank gains access to the interbank market, despite the ongoing adverse economic situation and continuing Greek risk aversion. The successful completion of the transaction is part of the effort of the Group to gradually lower its dependence from ECB funding and to return to the international markets.
Group Deputy CEO Mr Nikolaos Karamouzis stated: “The recent transactions of Eurobank EFG in the international capital markets constitute an initial opening of the markets to Greek financial institutions – a very important step towards normalizing the function of interbank and capital markets, on which the funding capabilities of the Greek economy depend.
Eurobank EFG has undertaken a number of significant initiatives over the past few months to present the prospects of the Group, the Greek banking system and the economy, to international banks, institutional investors, large private clients, the international media and rating agencies.
In this context we present a more optimistic scenario, under specific conditions, for the development of the Greek economy, that fully takes into account several positive factors, including the results of the fiscal adjustment to date, the progress of structural reforms, the low leverage of the private sector, the role of the Greek shipping sector, the dynamics of Greek exports, the significant potential that lies in containing the grey economy and tax evasion, as well as the possibility to use public assets to reduce Public Debt and significantly improve the country’s growth prospects. However, macroeconomic imbalances, and most notably redressing the fiscal derailment and improving a still low competitiveness of the Greek economy, remain the country’s main challenge.
Return to fiscal health and to high and stable growth rates is required for Greece, prospective positive changes in the Eurozone’s architecture notwithstanding”.Eurobank EFG is a member of Eurobank EFG Group, a European banking organization with total assets of €86.5bn (9M2010). The Group employs more than 22,500 people and offers its products and services both through its network of over 1,600 branches and points of sale, and through alternative distribution channels in Greece, Bulgaria, Serbia, Romania, Turkey, Poland, Ukraine, United Kingdom, Luxembourg, and Cyprus. It is a member of the EFG Group, an international banking group with presence across 40 countries.